Update: Facebook IPO stumbles out of the gate

Social network's stock ends the day with small gains

1 2 Page 2
Page 2 of 2

Once trading actually began, the stock started out strong, trading at $42 per share, $4 above the official offering price of $38 the company set Thursday.

However, instead of rising from there, Facebook's share price began to fizzle, and dropped to below $39 just 20 minutes after trading began. Once the price hit $38, about 10 to 15 minutes later, the company's underwriters stepped in to bolster it and hold the price floor at $38, reported the Wall Street Journal.

TV commentators and online headlines began using words like "underperform" and "disappointing."

Ezra Gottheil, an analyst with Technology Business Research, said people may be jumping the gun. He contends that Facebook's stock price is hovering around where it started this morning because it was priced appropriately.

"I can say that if your IPO doesn't go up or down very much, then you priced it right," he added. "At this point, it's all about perception and expectation. The stock price is just a noise meter."

Regardless of the ups and downs the stock is going through today, there's been a huge amount of interest and excitement around the event.

As trading began, people were standing around Times Square in New York City, staring up at giant screens showing Facebook's stock numbers. At the same time, Twitter momentarily staggered under the crush of tweets about the IPO.

As noteworthy as this day has been for many in the financial and tech industry, it's been a tough day for other social networking companies.

The Wall Street Journal reported soon after trading of Facebook's stock began that LinkedIn's stock price was down 2.6% and Groupon was down 6%. Pandora also was down, dropping 5%.

Zynga, though, might have fared the worst. The online gaming company's share price toppled a full 13%, landing at $7.17, according to MarketWatch . Trading on that stock was halted, later reinstated, then halted for a second time.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed . Her email address is sgaudin@computerworld.com.

See more by Sharon Gaudin on Computerworld.com.

Copyright © 2012 IDG Communications, Inc.

1 2 Page 2
Page 2 of 2
7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon